Unum Group — Remuneration Information 2013

May 10, 2013

DEFA14A 1 d537100ddefa14a.htm DEFA14A DEFA14A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

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Unum Group

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Proxy Solicitation Discussion Unum Group | May 2013

Unum’s Human Capital Committee and Board of Directors adhere to a philosophy and demonstrated practice of pay for performance and believe that the Company’s executive compensation programs are fully aligned with the interests of shareholders. Executive pay is targeted at the median of the appropriate comparison groups that include companies Unum competes with in the marketplace. In evaluating performance, the Committee considers total shareholder return over the short and long-term, operating performance and the overall strength and strategic position of the Company. The Committee’s compensation decisions for 2012 reflect this. While calendar year 2012 total shareholder returns lagged proxy peers and resulted in lower incentive awards for the CEO, the Company’s total shareholder return has significantly exceeded its peers and the overall market during his ten-year tenure as CEO. Further, total shareholder return in the first quarter of 2013, as well as for the trailing twelve months, also exceeded peers and the market. The Company had strong performance relative to peers in 2012 in a number of important metrics including EPS growth, return on equity, and book value growth. Executive Summary 2

In 2012, the Committee and management completed a review of our executive compensation program. As part of the process, we evaluated the reports of proxy advisory firms as well as feedback from our shareholder outreach program to institutional investors conducted in the first half of 2012. Based on the feedback received, the Committee has taken or authorized the following principle actions to be taken in 2013 to better align the interests of shareholders and executives: established new performance goals for our long-term incentive plan to reduce overlap with the performance goals in our short-term incentive plan introduced performance share units which are based on three-year prospective goals with a modifier tied to relative total shareholder return enhanced our disclosure of short- and long-term performance metrics by including threshold, maximum and actual performance for each metric Shareholder Outreach 3

Decisions the Committee made in 2013 for the CEO’s 2012 performance reflected both Company performance and total shareholder return. His short-term incentive award was down 25.5% year-over-year; payout was 68% of target His long-term incentive award was down 22%; payout was 91% of target Calendar year 2012 was a transition year for the changes in the long-term incentive plans. While the CEO’s grant for 2012 performance (made in early 2013) reflects the new mix of performance shares and performance-based restricted stock units, the changes are not yet reflected in the Summary Compensation table. By 2014, these changes will be fully incorporated in the Summary Compensation table which forms the basis for quantitative analysis by proxy advisory firms. 2012 Compensation Decisions 4

The two pay for performance elements the Committee decided in February 2013, based on 2012 performance, are the annual incentive award and the long term incentive award. A comparison of proxy peers shows our CEO incentive compensation to be well aligned. 2012 Compensation Decisions CEO INCENTIVE COMPENSATION COMPARISON Annual Incentive Award Long Term Incentive Award $5,463 $5,000 $1,489 $2,291 $’s in thousands $’s in thousands * See Appendix for list of Unum’s Proxy Peers and details related to the calculation of peer median 5 Unum Peer Median * Unum Peer Median * Unum CEO at 21 percentile Unum CEO at 53 percentile st rd

We acknowledge that total shareholder return for calendar year 2012 lagged our Proxy peers and the Committee considered this in its decision making process and reflected it in the award made. Unum’s cumulative total shareholder return over the last 10 years have exceeded those of our proxy peers and the broader market. Total Shareholder Return CONSISTENT VALUE CREATION * Through 3/31/2013 * * Cumulative Total Shareholder Returns 250.0% 200.0% 150.0% 100.0% 50.0% 0.0% YTD2013 1-Year FY2012 3-Year 5-Year 10-Year Proxy Peer Average S&P 500 UNM 6

Unum’s strong performance through a difficult economic period reflects the Company’s commitment to disciplined risk management and shareholder value creation. Total Shareholder Return CONSISTENT VALUE CREATION 140 120 100 80 60 40 20 - 2007 2008 2009 2010 2011 2012 2013* Unum Group S&P 500 Proxy Peer Median 7 Indexed Total Shareholder Returns * Through 3/31/2013

Operating Earnings Per Share Company Performance Years 2004-2007 do not reflect the impact of ASU 2010-26 and special items * EPS Compound Annual Growth Rate ‡ Operating earnings per share, which we define as operating earnings or loss per diluted common share, is a non-GAAP financial measure. Refer to the Appendix for a reconciliation of this measure to net income or loss per share, the most directly comparable GAAP measure. 9.6% SOLID PROFITABILITY $4.00 8 $3.00 $2.00 $1.00 $0.00 2004 2005 2006 2007 2008 2009 2010 2011 2012 1Q12 1Q13 $0.73 $0.80 ‡

(Excluding AOCI) Balance Sheet BUILDING BOOK VALUE 11.9% Book Value Per Share ‡ ‡ Book value per share, excluding accumulated other comprehensive income (AOCI), is a non-GAAP financial measure. Refer to the Appendix for a reconciliation of this measure to net income or loss per share, the most directly comparable GAAP measure. $30.24 $27.03 $23.20 $25.69 $26.33 $29.55 12/31/2009 12/31/2010 12/31/2011 12/31/2012 3/31/2012 3/31/2013 9

Capital Management CONSISTENT RETURN OF CAPITAL TO SHAREHOLDERS * Projection for 2013 – This forward-looking statement is not based on historical information and is subject to numerous assumptions, risks and uncertainties, many of which are beyond our control. For a discussion of factors that could cause actual results to differ from those contained in this forward-looking statement, see Part 1, Item 1A of our annual report on Form 10-K for the year ended December 31, 2012 and our subsequently filed Form 10-Q. TOTAL $2,676 million $578 million Share Repurchases 2008 2009 $700 million --- 2010 2011 $356 million $620 million Dividend Increase --- +10% +12% +14% 2012 $500 million +24% 2013 $500* million TBD Rating Agency Actions S&P Upgrade Moody’s Upgrade Fitch Upgrade A.M. Best Upgrade S&P Upgrade Moody’s Upgrade 10

Both Glass Lewis and ISS have issued reports recommending a “FOR” vote on all items being voted on at the annual meeting with one exception – ISS has recommended an “against” vote on Say-on-Pay. Glass Lewis noted favorably the changes the Company made after soliciting shareholder input. In its analysis, Glass Lewis acknowledged the Company outperformed its peers in several important operating metrics such as EPS growth and ROE. It did note the underperformance in 2012 TSR. It viewed CEO compensation to be in line with peers using a three year weighted average. Overall, it raised its pay for performance grade for the Company. ISS acknowledged the changes the Company made but felt the Company was not sufficiently responsive to shareholder concerns. The Company disagrees with this conclusion as our direct dialogue with shareholders indicated two primary concerns which the Company has addressed: a preference for three year goals in the long term incentive plan and a reduction in the overlap of goals in the short term and long term incentive plans. We have a distinctly different proxy peer group from that used by ISS – only 35% overlap. We believe that our proxy peer group is the most appropriate given who we compete with for talent and capital. As we have done in the past, we will continue to reach out to shareholders as well as proxy advisory firms for feedback and input on our executive compensation programs. Proxy Advisory Firms 11

The Board and the Human Capital Committee strongly believe that Unum’s compensation programs have been designed and implemented in the best interests of shareholders and tightly align pay to Company performance. Therefore, the Board urges shareholders to vote “FOR” all the voting items, including Say-on-Pay. Even if you have already voted, you can change your vote at any time before the 2013 Annual meeting as described in more detail in the 2013 Proxy Statement. For assistance in changing your vote, contact Innisfree M&A Incorporated toll-free at 1-888-750-5834. Voting Recommendations 12

Appendix

Proxy Peers include the following companies: Peer Median Compensation based on most current compensation disclosed in 2013 proxy filing or subsequent Form 4/8-K filings, noting the following: Aetna: Aggregate annual incentive includes value of both RSUs and cash awards. Genworth: Excluded for purposes of determining peer median for annual incentive because no bonus data available for new CEO effective January 2013. For purposes of determining peer median LTI includes 3-year annualized value of 1,000,000 SARs and 100,000 RSUs granted upon hire. Humana: New CEO effective in January 2013; annual incentive based on performance in prior role. Marsh & McLennan: New CEO effective in January 2013; annual incentive based on performance in prior role. Prudential: Aggregate annual incentive includes value of both deferred Book Value Units and cash awards. Proxy Peers Aetna Lincoln Aflac Marsh & McLennan Aon Metlife Assurant Principal Financial Cigna Protective Life CAN Financial Prudential Financial Genworth Financial Stancorp Financial Hartford Financial Services Torchmark Humana 14

Reconciliation of Non-GAAP Financial Measures 15